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Taylor Maritime Investments Limited (LON:TMI) has announced that it will pay a dividend of $0.02 per share on the 29th of November. This means the annual payment is 7.9% of the current stock price, which is above the average for the industry.
Check out our latest analysis for Taylor Maritime Investments
If the payments aren’t sustainable, a high yield for a few years won’t matter that much. Taylor Maritime Investments isn’t generating any profits, and it is paying out a very high proportion of the cash it is earning. These payout levels would generally be quite difficult to keep up.
EPS could fall quite dramatically over the next 12 months if recent trends continue. This means that the company will be unprofitable and it could face the difficult decision of satisfying income-seeking shareholders or putting additional pressure on its balance sheet.
The dividend hasn’t seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn’t that long in the grand scheme of things. Since 2021, the annual payment back then was $0.07, compared to the most recent full-year payment of $0.08. This works out to be a compound annual growth rate (CAGR) of approximately 4.6% a year over that time. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn’t want to rely on this dividend too much.
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, initial appearances might be deceiving. Over the last year, Taylor Maritime Investments’ EPS has fallen by 306%. Reduced dividend payments are a common consequence of declining earnings. However, we would never make any decisions based on only a single year of data, especially when assessing long term dividend potential.
Overall, while some might be pleased that the dividend wasn’t cut, we think this may help Taylor Maritime Investments make more consistent payments in the future. The company seems to be stretching itself a bit to make such big payments, but it doesn’t appear they can be consistent over time. Overall, this doesn’t get us very excited from an income standpoint.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we’ve picked out 3 warning signs for Taylor Maritime Investments that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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